[EDITORIALS]Pension reform needed now

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[EDITORIALS]Pension reform needed now

In order to revise the present structure of paying lower insurance premiums and receiving more pension benefits, the government submitted a National Pension reform plan to the National Assembly.
The plan faces heavy opposition. Even from within the ruling Uri Party, there are voices against raising the premium to 15 percent of income, from 9 percent, and lowering payment to 50 percent, from 60 percent. Some in the Uri Party expressed objection to raising insurance premiums and suggested lowering payments to 55 percent until 2007 as a compromise.
If the extra burden is imposed on people, the reaction will be strong and become a political burden. But the governing camp has the responsibility to persuade people considering the nation’s future. The Uri Party received more votes because of the public’s belief that it would protect the nation’s interests over those of faction’s.
Those Uri Party members who don’t support government proposal insist on raising the premium and lowering the payment starting from 2008. But they are overlooking the fact that by then, the number of pensioners will grow to 3.23 million, three times larger than now, and the intensity of resistance against cutting payments will be much stronger then. There is a logical fallacy in insisting that a reform that is difficult now be postponed to a time when it will be even harder to carry out.
At the moment, every country in the world is struggling to reform its pension system. Japan passed a bill in June that would raise the insurance premium while lowering payments. In major European countries, pension system reform is under way. Structurally, it is unavoidable because the population of the aged people is increasing rapidly while that of the working generation, which pays the insurance premiums, is falling fast because of the aging society and low birth rate.
In Korea, the urgency for reform is greater than in other countries. Among OECD member countries, Korea’s population is aging the fastest and its birthrate is decreasing at a rate that will cut the population by one-third after 100 years. If the present pension system is not revised, the generation working in 2050 will have to pay 30 percent of their income for insurance premiums, and our economic growth potential will be exhausted. The governing party must recognize the urgency of the situation and persuade people to prevent a pension disaster.
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